The Numbers and Uncle Jerry in Jackson Hole, 2026 Forecast, What's a Clipper, and it's Labor Day!
The Numbers This Week…
…were overlooked by the speech Fed Chair Jerome Powell gave on Friday – see the next segment - but I’ll conduct the weekly exercise anyway.
In my last Report, I thought we should pay attention to two things that came up this past week: Jobless claims and leading economic indicators.
The claims came in higher than expected, at 235,000 new claims for unemployment, vs. 225,000 expected and last week's 224,000 actual.
It is worth noting that the number was statistically corrected for ‘seasonal adjustments’.
The actual new claims were an unusually low 194,000.
Regardless, the number of folks collecting unemployment rose to 1,970,000, the highest level since November 2021.
Hence the concern from the Fed.
The Leading Economic Indicators report, published by The Conference Board, showed a slight drop of 0.1%, but that was expected. And it was better than last month’s 0.3% drop.
Pessimistic consumer expectations and weaker new orders brought it down.
The Conference Board maintained that they are not projecting a recession, but that growth, as measured by GDP – Gross Domestic Product – is expected to be 1.6% for 2025, before slowing to 1.3% in 2026.
Jackson Hole – When Jerry Talks, people listen
Why did the stock market jump on Friday? Was it something I said? No, it was something that Jerry said.
Jerry is Jerome Powell, the Chair of the Federal Reserve, and he gave a speech on Friday, which seemed to indicate that the chances for a rate cut may have gone up.
While the tariff policies have started to result in increased prices for consumers, the belief is that the tariff effect will be a one-time event and spread out over many months as the prices work through the supply chain.
More concerning for the Fed is that the labor market is weakening as past employment reports have been revised down.
It appears that the Fed is favoring the goal of maximum employment just slightly over the goal of stable prices.
Market analysts translated this stance to mean that the odds of a drop in rates in September were getting better.
2026
Labor Day is next Monday, which marks the end of summer and the beginning of the end of the year. At least the calendar year.
The fiscal year for the federal government starts October 1, and there’s no funding plan in place (again), but I’ll save that for another issue.
So you should be planning for 2026. Kiplinger puts out forecasts that I have found to be as good as any others, so I will share them with you here. Keep in mind, these are forecasts, not gospel.
GDP is expected to be 1.6% in 2026, down from 1.7% in 2025
Inflation will get down to 3% by year-end 2026 after starting the year at 3.4%.
Small businesses will see average wage hikes of 4%.
Health care premiums are expected to rise 8%, driven in large part by an 8% increase in spending on drugs, driven by weight loss drugs and gene and cell therapies.
You know, if folks could just exercise 30 minutes/day and cut out the junk food…
Oil prices will continue to drop. This will translate to lower gas and diesel prices.
The offset is electricity costs. That is expected to rise as power for AI becomes all-consuming.
I can’t wait for the day when the Edison AI decides to cut power to a hospital or airport to direct more power to its processors.
“Daystom to M5…”
A shout-out to anyone who can tell me what that quote references without consulting anything other than your own brain.
Truck spot shipping rates will rise just 1%. Ocean shipping rates are expected to be similar to 2023.
Commercial insurers will be fighting for the business of low-risk property customers. Consequently, for polices with favorable histories and not exposed to natural risks (like being in California), rates should be flat or fall. For those exposed to natural risks (like being in California), those policies will see a 10% increase.
Umbrella and excess liability – up as much as 20%. Ouch.
While cybersecurity insurance is expected to increase, you can lower your increase by investing in digital security.
Legal costs will increase about 3% to 5% while accounting work may see a 10% increase.
Finally, travel and hospitality will see modest increases of 1% to 2%.
There you have it. Do your 2026 projections now and adjust as 2025 wraps up.
What’s a Clipper?
No, it’s not an NBA team that spends a lot of money on aging basketball players.
Well, technically, it is, but it’s not what I’m referring to.
It’s a person who helps streamers, podcasters, and others expand their audience by making buzzy moments go viral on social media.
Evidently, it is fairly lucrative. One fellow quit his finance job and now runs a team of eight clippers.
He makes anywhere from $20,000 to $30,000 per month.
The 21-year-old founder of Cluely, an AI note-taking startup, hires clippers to plaster its content across the internet. He said:
“You’re stupid if you’re making an hour-long podcast and only posting it on one channel – The only way you can ensure a viral moment is to post it across thousands of different accounts.”
Wow. I’m guessing a weekly email isn’t going to do it, then.
And as summer wraps up, next Monday is Labor Day! Some facts about Labor Day:
It became a federal holiday in 1894. It was promoted, not surprisingly, by the Central Labor Union and the Knights of Labor.
Oregon was the first state to make it an official public holiday.
It marks the unofficial end of summer. It doesn’t mean it gets cooler, it just means everyone is back at school, and your commute just took a little longer.
I think of Labor Day as kind of a memorial day for the folks that built this country using their bare hands and designing it with a slide rule way before the creation of the $395 HP35 calculator in 1972. I think of my parents and their parents, who put in 40 years with the same company or raised their children, or both. The occupation doesn’t matter: truck driver, soldier, engineer, government worker, office clerk, factory worker, attorney, steel mill worker, cook, server, manager, housekeeper, and yes, banker. What does matter is that they worked every day at a job (or two or three) that they were good at, with little fanfare. They did it to support their families and put food on the table, and they left the world a better place because of it.
On this Labor Day, I ask that you honor the folks who, through their labor, put you where you are today. Whether they are your parents, grandparents, aunts and uncles, a mentor, or whoever, it was their effort that created a base that helped get you where you are today. Now that’s worth a Labor Day toast and a cold one on a three-day weekend.
See you in two weeks!
